Merit review WC068/18

Finding on review

1. The following are findings made by the State Insurance Regulatory Authority (the Authority) on review.

2. The amount of the Worker’s pre-injury average weekly earnings is $1200.04.

Recommendation based on findings

3. The Insurer is to calculate the Worker’s entitlement to weekly payments of compensation for any week in which they were entitled to such payments in accordance with my finding above.

4. This recommendation is binding on the Insurer in accordance with section 44BB(3)(g) of the 1987 Act.

Background

5. The Worker sustained a right wrist fracture while working with the pre-injury employer 1. The accepted date of injury is March 2018.

6. In March 2018, the Insurer made a work capacity decision. It determined that the amount of the Worker’s pre-injury average weekly earnings (PIAWE) are $1228.54.

7. In June 2018, the Insurer undertook an internal review. It determined that the amount of the Worker’s PIAWE are $1182.55.

8. The Worker’s application for merit review was received by the Authority in July 2018. I am satisfied that the application was made within time, pursuant to section 44BB(3)(a) of the 1987 Act. The application has been made in the form approved by the Authority.

Legislation

9. The legislative framework governing work capacity decisions and reviews is contained in the:

11. Section 44BB of the 1987 Act provides for merit review of a work capacity decision of the Insurer, by the Authority.

Submissions

12. In the application for merit review, the Worker makes the following submissions:

They note that their group certificates were not included in the internal review as they were not for the time frame of 12 months prior to the injury. They have therefore had these earnings broken up into PAYG statements to give an accurate figure.

They have also included payslips that they didn’t have at the time of the internal review.

They question whether overtime and penalties should be included in the calculation of their PIAWE.

13. In reply, the Insurer makes the following submissions:

At the time of the injury, the Worker was employed by 3 employers: pre-injury employer 1, pre-injury employer 2 and pre-injury employer 3.

They were employed on a casual basis with all 3 employers and there is no evidence that they work “the prescribed hours” for any employer.

Their PIAWE has been assessed in accordance with Item 8 of Schedule 3 of the 1987 Act.

The Worker has submitted wage records which were not available at the time of the internal review. Based on this information their PIAWE would be calculated at $1,177.62:

As the total ordinary hours exceeds the prescribed number of hours (38), 38 should be used – column 3, Item 8 $30.52 x 38 hours = $1177.62

If it is accepted that overtime and shift allowance should be included for all 3 employers PIAWE would be $1,554.66

14. The Authority wrote to the Worker and the Insurer providing a further opportunity to make submissions as to whether Item 7 of Schedule 3 applied to the calculation of the Worker PIAWE.

15. In August 2018, the Insurer provided the following additional submissions:

Certificates of capacity indicate that the Worker was totally unfit for all employment from x-x March 2018. They were then certified as fit for suitable duties for full hours from March 2018.

There is no evidence that indicates that the Worker has capacity to work for any of their 3 pre-injury employers. As they were totally incapacitated for all of the roles they were performing, item 7 of Sch 3 does not apply and the Worker’s PIAWE should be assessed in accordance with Item 8 of Sch 3.

16. In August 2018, the Worker made the following additional submissions:

They were advised by employer 3 (now renamed company a) that they were not allowed to do any work with their companies during their recovery period: March 2018 – May 2018.

As soon as their doctor certified their fit to work, after May 2018, they sent their certificate to their employer, however, they did not accept this and cancelled their return to work shifts. They asked that their doctor “officially put it in a letter”. It was only after that that they were allowed to return to work with the employer 3.

Documents considered

17. The documents I have considered in this review are those listed in, and attached to, the application for merit review, the Insurer’s reply and any further information provided by the parties.

18. I am satisfied that both parties have had the opportunity to respond to the other party’s submissions and that the information provided has been exchanged between the parties.

Reasons

PIAWE

19. Section 44C(1) of the 1987 provides a definition and method of calculating Pre-Injury Average Weekly Earnings (PIAWE) in most instances. However, section 44C(4) of the 1987 Act provides for alternative methods of calculating PIAWE if a worker is “of a class referred to in Column 2 of an item in Schedule 3…”.

20. Information before me, including payslips and submissions from both the Worker and the Insurer indicate that the Worker was working for three employers at the time of their injury: pre-injury employer, pre-injury employer 3, and pre-injury employer 2 (later taken over by the company a).

21. I am satisfied that the Worker was a “worker employed by 2 or employers” at the time of their injury. In these circumstances, Items 2 – 8 of Sch 3 of the 1987 Act potentially apply to the calculation of the Worker’s PIAWE. For reasons that follow, I am not satisfied that the Worker was a class of worker as described in Items 1-7 of Sch 3 at the time of their injury and I find that their PIAWE should be determined in accordance with Item 8.

22. I note for the sake of completeness that there is no information before me that supports that Items 1 or 9 of Sch 3 would apply to the Worker’s circumstances and that neither of the parties have put submissions to me in this regard.

Ordinary hours fixed in a fair work instrument – Items 2, 4 and 5

23. In order for the Worker to be found to be a worker of a class described in Items 2, 4 or 5, I would need to be satisfied that they worked for one of their employers “for at least the ordinary hours fixed in an applicable fair work instrument”.

24. The Insurer submits that the Industry Award 2010 was an applicable fair work instrument for all 3 of the Worker’s roles at the time of their injury. However, their hours were not fixed by this award and they worked hours which fluctuated from week to week. I note the Worker’s payslips support this to be the case. Further, the Worker confirmed that they were employed on a casual basis and worked varying hours each week.

25. Based on this information, I am not satisfied that the Worker worked for ordinary hours fixed in an applicable fair work instrument in any of their roles at the time of their injury. Therefore, I find that the Worker was not a class of worker as described in Items 2,4 and 5 of schedule 3 of the 1987 Act at the time of their injury.

Works for “at least the prescribed number of hours” – Items 3 and 6

26. In order for the Worker to be found to be a worker of a class described in Items 3 or 6, I would need to be satisfied that they worked for one of their employers for “at least the prescribed numbers of hours each week”.

27. Clause 7 of the Regulation provides that “the prescribed number of hours” is 38 hours per week. the Worker’s payslips do not support that they worked for at least 38 hours each week in any of their roles. Therefore, I find that the Worker was not a class of worker as described in Items 3 or 6 of Sch 3 of the 1987 Act at the time of their injury.An injury that results in an incapacity to work - Item 7

28. This item applies if the Worker can be described as a class of worker who at the time of their injury had 2 or more employers and “sustained an injury that resulted in an incapacity to work for one of more of those employers but not for all of those employers”.

29. The Insurer submits that there is no evidence that indicates that the Worker has capacity to work for any of their 3 pre-injury employers. As they were totally incapacitated for all of the roles they were performing this item does not apply.

30. There are certificates of capacity before me which support that the Worker did not have capacity to work in any type of employment for a short period of time after their injury (until March 2017). However, from March 2017 certificates issued by the Worker nominated treating doctor indicate that they had some capacity for work with restrictions.

31. Most recently, from May 2018, their doctor has certified them with capacity to return to pre- injury duties with no recommended restrictions. There is also a letter before me from the medical doctor dated June 2018 which states that the Worker is fit for their “usual occupation”.

32. The most recent information before me indicates that the Worker no longer has physical restrictions or limitations in respect of the hours of work they have capacity to undertake which result from their injury. Rather, the information indicates that they have had an unrestricted capacity to return to work since May 2018. I therefore do not consider that they sustained an injury that results in incapacity to work for one or more of their employers. I find that the Worker was not a class of worked as described in Item 7 of Sch 3 of the 1987 Act at the time of their injury.

Class of worker under Item 8 worker at time of injury

33. In summary and based on the above reasons, I am not satisfied that the Worker is a class of worker who at the time of their injury would satisfy items 1-7 of Sch 3 of the 1987 Act. I therefore find that they are a class of worker under Item 8 as they are a “worker employed by 2 or more employers in circumstances other than the described in the preceding provisions [Items 1-7] of this Schedule.”

Calculation of pre-injury average weekly earnings

34. As the Worker is a class of worker under Item 8, Column 3 of Sch 3 of the 1987 Act provides the basis to calculate their PIAWE as:

The worker’s pre-injury average weekly earnings are the worker’s average ordinary earnings expressed as an amount per hour for all work carried out by the worker for all employers multiplied by:

(a) the prescribed number of hours per week, or

(b) the total of the worker’s ordinary hours per week, whichever is the lesser.

35. To calculate the Worker’s PIAWE, I must determine their average “ordinary earnings” expressed as an amount per hour for all work carried out by them for all employers, multiplied by the prescribed number of hours per week (38) or the total of their “ordinary hours” per week, whichever is the lesser.

Ordinary hours and ordinary earnings – pre-injury employer

36. Wage records before me support that the Worker was continuously employed with the pre-injury employer for the 52 weeks immediately before the injury. I find this to be the relevant period pursuant to section 44D(1)(a) of the 1987 Act.

37. The Worker’s payroll statement for their employment with the pre-injury employer indicates that they received a base hourly rate of pay for ordinary hours worked. In these circumstances, their ordinary earnings are calculated pursuant to section 44E(1)(a) of the 1987 Act:

Subject to this section, in relation to pre-injury average weekly earnings, the ordinary earnings of a worker in relation to a week during the relevant period are:

(a) if the worker’s base rate of pay is calculated on the basis of ordinary hours worked, the sum of the following amounts:

(i) the worker’s earnings calculated at that rate for ordinary hours in that week during which the worker worked or was on paid leave,

(ii) amounts paid or payable as piece rates or commissions in respect of that week,

(iii) the monetary value of non-pecuniary benefits provided in respect of that week, or

38. “Base rate of pay” is defined by section 44G of the 1987 Act as:

(1) In relation to pre-injury average weekly earnings and current weekly earnings, a reference to a base rate of pay is a reference to the rate of pay payable to a worker for his or their ordinary hours of work but does not include any of the following amounts (referred to in this Division as base rate of pay exclusions):

(a) incentive based payments or bonuses,

(b) loadings,

(c) monetary allowances,

(d) piece rates or commissions,

(e) overtime or shift allowances,

(f) any separately identifiable amount not referred to in paragraphs (a) to (e).

39. The information before me indicates that the Worker worked or was on paid leave for each week during the relevant period. Over the 52 weeks, the Worker earned a total of $9,972.17 for 309.25 ordinary hours of work. Therefore, their average weekly ordinary earnings are $191.77 and ordinary hours are 5.9.

40. The Worker received various shift allowance payments during the relevant period. I note that in their submissions, the Worker questions whether overtime and penalties should be included in the calculation of their PIAWE. Such payments are excluded from the calculation of their base rate of pay and therefore their ordinary earnings pursuant to section 44G(1)(e) of the 1987 Act.

41. In some instances, such payments are later included in the calculation of a worker’s PIAWE under section 44C(1)(b) of the 1987 Act. However, as the Worker is a class of worker as described in Item 8 of Sch 3, Column 3 of that Item provides the method of calculation of their PIAWE. As the section 44C definition and method of calculation of PIAWE does not apply to the Worker’s case, subsection (1)(b) (which is the provision which allows for the inclusion of these payments) also does not apply and overtime and shift allowance payments are not included in the calculation of their PIAWE.

42. There is no information before me which indicates that the Worker received any piece rates, commissions or non-pecuniary benefits during the relevant period that would be relevant to the calculation of their ordinary earnings.

Ordinary hours and ordinary earnings – pre-injury employer 3

43. The Worker’s payslips for this role were only provided for the pay period beginning July 2017. In light of this information, the Authority sought clarification from the parties as to the relevant period/the Worker’s period of continuous employment in this role prior to the injury.

44. The Insurer submits that “the available information” indicates that the Worker was employed by all of their employers for the entire 52 weeks period prior to their injury and this should be the relevant period. However, it did not point to which information it relied on in this regard. As noted above, payslips are provided from July 2017. In a letter dated May 2018, the Worker states “there are pay slips from when I started working with pre-injury employer 3 in July 2017”.

45. The information before me supports that the period of continuous employment prior to the Worker’s injury was from July 2017. I therefore find the relevant period pursuant to 44D(1)(b) of the 1987 Act to be July 2017 – March 2017 (31 weeks and 4 days or 31 and 4/7 weeks).

46. There is no payslip before me for the period September 2017. The Worker indicates in their letter of May 2018 that they were “off work” during this period. As the Worker appears not to have worked or been on paid leave, I am satisfied that this period should be excluded from the calculation of their ordinary earnings pursuant to section 44E(1)(a)(i) of the 1987 Act.

47. There are also no payslips before me for the pay periods November 2017 – December 2017, January 2018 and February –March 2018 despite the Authority having requested these from both parties. I will therefore also exclude these weeks in the calculation of the Worker’s ordinary earnings. This leaves a total of 23 weeks and 4 days (31 weeks and 4 days minus 8 weeks).

48. Over the relevant period, the Worker earned a total of $14,987.89 for 485.75 ordinary hours of work. Therefore, their average weekly ordinary earnings are $635.85 and ordinary hours are 20.6.

49. Again, whilst I note that the Worker received various shift allowance payments during the relevant period, these are not included in the calculation of their ordinary earnings pursuant to section 44G(1)(e) of the 1987 Act and for reasons outlined in more detail above.

50. I also note that the Worker received various payments for “First Aid”. Their payslips indicate that such amounts are separate and additional to their base rate of pay for ordinary hours. I therefore consider that these amounts are “separately identifiable amounts” that should not be included in the calculation of ordinary earnings pursuant to section 44G(1)(f) of the 1987 Act.

51. There is no information before me to indicate that the Worker received any piece rates, commissions or non-pecuniary benefits during the relevant period that would be relevant to the calculation of their ordinary earnings.

Ordinary hours and ordinary earnings – pre-injury employer 2

52. The Worker’s payslips for this role were only provided for the pay period beginning June 2017. In light of this information, the Authority sought clarification from the parties as to whether their period of continuous employment in this role was from June 2014- March 2018. the Worker indicated this was correct and that prior to June 2017 they worked for a different division of pre-injury employer 2.

53. As noted above, the Insurer submits that “the available information” indicates that the Worker was employed by all of their employers for the entire 52 weeks period prior to their injury and this should be the relevant period. However, it did not point to which information it relied on in this regard. As I only have available payslips for the period from June 2017 and in light of the information provided by the Worker, I find the relevant period is from June 2017 – March 2018 (35 weeks).

54. The Worker states in the letter dated May 2018 that they did not work during the pay period September 2017 – October 2017. Their payslips support that they did not work and was not on paid leave during the 4-week period covered by payslips dated September and October 2017. I will therefore exclude these weeks in the calculation of the Worker’s ordinary earnings, leaving a total of 31 weeks.

55. Over the relevant period the Worker earned a total of $29,362.67 for 921.95 ordinary hours of work. Therefore, their average weekly ordinary earnings are $947.18 and ordinary hours are 29.7.

56. Again, whilst I note that the Worker received various shift allowance payments during the relevant period, these are not included in the calculation of their ordinary earnings pursuant to section 44G(1)(e) of the 1987 Act.

57. There is no information before me to indicate that the Worker received any piece rates, commissions or non-pecuniary benefits during the relevant period that would be relevant to the calculation of their ordinary earnings.

Findings on PIAWE

58. Column 3, Item 8, Schedule 3 provides that the Worker’s average ordinary earnings are to be expressed as an amount per hour for all work carried out by their, for all employers.

59. The Worker’s average ordinary earnings for all work carried out by them, for all employers is $1,774.80 ($191.77 + $635.85 + $947.18), for a total of 56.2 ordinary hours of work (5.9 + 20.6 + 29.7 hours).

60. Therefore, the Worker’s average ordinary earnings expressed as an amount per hour is $31.580071 ($1,774.80 / 56.2 hours).

61. Column 3, Item 8, Schedule 3 provides that the above figure ($31.580071) is to be multiplied by the prescribed number of hours per week (38) or the total of the workers ordinary hours per week, whichever is the lesser.

62. In accordance with Column 3, Item 8, Schedule 3 of the 1987 Act, I find the Worker’s PIAWE is $1200.04 ($31.580071 per hour x 38 hours per week).

Merit Review ServiceDelegate of the State Insurance Regulatory Authority